Intel Lowers Q4 Business Expectations by 14 Percent

Facing weak demand around the world for all of its products, Intel revealed that its previous revenue forecast for the fourth quarter of this year had been lowered by around 14 percent. The announcement made by the worldwide largest chip manufacturer clearly indicates that the economic crisis is about to impact computer sales during the holiday season and beyond it.

According to the Santa Clara company, a fourth-quarter revenue of $9 billion is expected, plus or minus $300 million, which is much lower than the previously announced revenue expectation of between $10.1 billion and $10.9 billion. All geographies and market areas register a significantly lower than expected demand, which would also affect revenue. Intel stated that the PC supply chain had begun aggressively reducing component inventories.

The company lowered its expectation for fourth-quarter gross margin from the previous 59 percent, plus or minus a couple of points, to a current 55 percent, plus or minus a couple of points. The gross margin is said to be affected by the lower revenue and by the weaker demand. Also, the company said that it expects spending to be of $2.8 billion, lower than the previously announced $2.9 billion, again due to smaller revenue and profit. Intel's spending for the full year should be of approximately $11.4 billion, down from the previous expectation of about $11.5 billion. The company added that all other expectations remain valid.

Intel revealed that from the close of business on November 28 until January 15, when the fourth quarter results are published, it would see a “Quiet Period”. The chip maker added that the “Business Outlook disclosed in the company's press releases and filings with the SEC should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to an update by the company,” reports news site CDRinfo.